Namibia’s government approved a NAD1.6 billion (USD222 million) bailout for Air Namibia, however the national carrier has not yet received the funds due to a budget issue (The Namibian, 16-Aug-2011). Cabinet approved the final injection but the Treasury has not yet budgeted the amount, as it only allocated NAD400 million for the company for 2011. Reports suggest the carrier needs to receive NAD700 million in 2011, NAD800 million in 2012, and NAD160 million in 2013. Air Namibia has reportedly begun procuring contracts for the purchasing and leasing of aircraft.
Government approves NAD1.6bn bailout for Air Namibia
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The three large US global network airlines – American, Delta and United – are all at different phases of their respective balance sheet evolutions. Delta is enjoying its newly minted status of reaching investment grade according to two ratings agencies; United has decided to expand its level of shareholder returns after lagging its peers in that metric during its still ongoing merger integration. Even after recently deferring some Airbus widebody orders, American remains in the middle of a significant fleet revamp. The company is also still completing certain facets of its merger integration with US Airways, which is one driver for American’s larger cash balances compared with its global network peers.
Each of the three airlines seems to be striving for the right balance of investment in their businesses – maintaining a robust balance sheet and delivering ample shareholder returns. The difference is in the strategies followed.